Victorian election special edition

December 11, 2014

Dear Readers,

Greetings for the first time since our last bumper email edition on Sunday, November 23. If you'd rather not receive these email newsletters, click here to unsubscribe.

Daniel Andrews delivers for Labor

Daniel Andrews has made history in Victoria, defeating a lacklustre Coalition government after just one term in Opposition.

The Socialist Left faction member campaigned well and with great discipline. He's a good performer who is driven by common sense and deserved the win.

The Labor Party doesn't usually let the Left lead them into Government. Prominent Left leaders such as Julia Gillard, Joan Kirner, Anna Bligh and Nathan Rees have secured the top job from government after Right leaders moved on.

However, Andrews was a solid Health Minister under John Brumby and with that background growing up on a farm, isn't the usual sort of inner city lefty who doesn't understand financial management and the needs of business.

John Roskam claimed on The Bolt Report this morning that Ted Baillieu was more responsible for the defeat than Tony Abbott. Both played a role, but Jeff Kennett was right about Abbott's appalling contribution in recent weeks.

Bolt and Roskam also tried the line that the Napthine government was too left wing. What rot. Napthine would have survived if the religious right hadn't infiltrated the Victorian party and installed candidates such as Geoff Shaw, who turned into a complete disaster.

Victorian has traditionally been more progressive than the rest of Australia and this was on display again yesterday.

Lots of diversity in the Victorian upper house

Despite all the mainstream media and big party whinging, minority government isn't such a bad thing and diverse representation in upper houses usually delivers better policy outcomes.

That has certainly been the experience at City of Melbourne over the past two years where no one group has the numbers and this is generally delivering good merit-based policy making, such as all these excellent governance reforms.

Tim Colebatch was ridiculously premature with this upper house analysis in The Age (print and online) today. These absolute statements were foolishly unconditional:

The Shooters appear likely to win seats in Eastern Victoria, with 2.6 per cent of the vote, Northern Victoria (3.5 per cent), and Western Victoria (2.4 per cent). In each case, the seats have been taken from the Coalition, with MPs Andrew Ronalds and David O'Brien among the losers. The new Shooters Party MPs will be led by husband and wife team Jeff and Nicole Bourman, who live in Hampton but won seats in Eastern Victoria and Western Victoria respectively. Mr Bourman is a former policeman.

Liberal frontbencher Richard Dalla-Riva survived in Eastern Metropolitan, but his Labor counterpart Brian Tee did not, losing his seat to Samantha Dunn of the Greens.

Preference whisperer Glen Druery usually comes back to working for the Shooters but there is no way he will deliver 3 seats to them in the Victorian upper house. The DLP is a better prospect and the Liberal Democrats are also in the mix.

However, it does appear likely that Clive Palmer will continue his senate record of delivering more Greens into Australian Parliaments. South Australia's Senator Sarah Hanson-Young is only there courtesy of Clive and the same will probably apply to Samantha Dunn in Eastern Metropolitan, who, along with Ellen Sandell, will quickly emerge as one of the best operators in the enlarged Green party room.

I've learnt the lesson of early predictions about upper house outcomes. Go back and read this Mayne Report edition from shortly after the 2010 election. The key lesson is that Liberals always do best from postal votes and the Greens do best with early voting. However, Labor's early votes may be stronger this time as when people want a change, they tend to vote early.

Upper house predictions

Having warned against making early predictions, here are some of the more likely scenarios in the 8 upper house regions. You can see all the votes in the 8 upper house regions here.

Northern Metro: 2 Labor, 1 Liberal, 1 Green with Sex Party's Fiona Patten in the mix for the final spot. She polled a healthy 2.9% and will benefit from a Green surplus of about 2%, plus the 1.6% donkey vote which went to The Basics Rock n Roll party. The key determinant will be whether she she can stay in the preference count longer than Family First. This was my exact scenario 4 years ago as was explained in this Mayne Report edition at the time.

Eastern Victoria: 2 Liberal, 2 Labor (courtesy of Green preferences) and 1 micro party from the Right after the 6 small Righties scooped 18% of the vote between them.

Southern Metropolitan:
2 Liberal, 1 Green and 1 Labor for sure. Last spot is a bit of lottery between the 3rd Liberal, 2nd Labor or a micro-party.

Western Metropolitan: the Libs will drop from 2 to 1, Labor is guaranteed 2 and the Greens will probably sneak home again on the back of Palmer preferences. At this point, fancy a 3rd Labor to take the final spot.

Northern Victoria: 2 Liberal, 1 Labor with a second Labor likely on the back of Green preferences. The right wing micros will win one spot with the DLP in good shape courtesy of a healthy donkey vote.

Eastern Metropolitan: The incoming planning minister Brian Tee is at risk. The only certainty is 2 Liberal and 1 Labor with the last 2 spots to be shared between Green Samantha Dunn, who will lift the quality of the Green party room, the 3rd Liberal and Tee at number 2 on the Labor ticket.

Western Victoria: definitely 2 Labor and 2 Liberal with the Greens starting favourite for the 5th spot with a healthy primary vote of 9.4%. The 6 Righties only have about 10% between them with the quota is 16.67%. However, the 3% Liberal surplus will help the right against the Greens.

South Eastern Metropolitan: definitely 2 Labor and 2 Liberal with the last spot a battle between the Green and Labor's number 3. Palmer's preferences support the Greens, which could be vital.

All up, the worst case scenario for Labor is 13 of the 40 upper house seats and the Libs can't do worse than 14. I'm predicting the majors will share 31 between them with the micros picking up a record 9 seats.

The Greens could double their numbers from 3 to 6 but are more likely to settle on 4 or 5. The micro parties of the Right are guaranteed a spot in Northern and Eastern Victoria but could snare up to 2 more depending on the lottery of these group voting ticket deals. Whatever happens, I very much doubt the right will have a majority and the most interesting question is whether the Greens will have the balance of power in their own right.

Newspapers losing their political power

For the first time that I can recall, a major political party has overcome editorials against them by the 4 major newspapers to deliver a historic victory.

The Age , the Herald Sun, The Australian and The AFR all advised their readers to return the Victorian Coalition for a second term.

Jeff Kennett also received widespread editorial support from major media outlets in 1999, but was defeated in what was a major shock at the time.

Yesterday's result in part reflects the declining influence of mass-market newspapers.

At a corporate or headline level, the Herald Sun took every opportunity to flog Daniel Andrews and one of their unfair front pages finished on Liberal Party bunting all over Victoria. It would be interesting to know if this was formally approved by News Corp.

However, the Herald Sun political reporters themselves, led by former Liberal staffer James Campbell, were a lot more neutral in their coverage. The Liberal campaign was ineffective and Campbell said as much on multiple occasions. It will be interesting to see if he survives as the Herald Sun's chief political reporter.

The Mayne Report: an example of media diversity at work

The Mayne Report relies on donations to survive and continue our efforts to independently call the play in politics, business and media. We backed Victorian Labor in our pre-election edition last Sunday, continuing a long tradition of generally supporting the opposition after being disappointed with the government of the day.

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Time for renewal in the Coalition ranks

The class of 2010 was probably the weakest influx of talent any Victorian election has delivered to the Coalition parties. Geoff Shaw was the worst, but there was plenty of other plodders.

Matthew Guy or Michael O'Brien will need to ensure that when the inevitable by-elections come, they insist on Cabinet quality replacements.

There should be at least 4 by-elections over the next two years, ideally all held on the same day. Those prospectively exiting include Denis Napthine, outgoing Attorney General Robert Clarke, Kim Wells, David Davis, Martin Dixon, Terry Mulder and Nationals leader Peter Ryan.

For mine, David Davis is a divisive factional player who should also make way for more policy-focused talent. As Health Minister, he mishandled the Ambos and nurses in what turned into a politically painful mistake.

The two defeated candidates who should definitely be accommodated in any batch of by-elections are Shannon Eeles in Albert Park and Sean Armistead in Frankston.

Matthew Guy for the top job

As for the Liberal leadership, I'm backing our new local member in Bulleen, Matthew Guy. Michael O'Brien is simply too wooden and Right wing for the job. Matthew is great on the stump, seriously gets multi-culturalism and communicates very effectively. The only potential problem is some governance issues in the planning portfolio coming back to bite. For instance, I hope he didn't personally solicit for donations from anyone who benefited from his frenzy of skyscraper approvals in the inner city.

He certainly had a well-funded $200,000-plus campaign in Bulleen. Who funded that?

What now for East West Link?

Between now and Christmas, Daniel Andrews will need to sort out the issue of the East West Link.

The seat of Melbourne has clearly been lost to the Greens. If Dick Wynne loses Richmond to Greens candidate Kathleen Maltzahn, then Daniel Andrews has a much reduced political interest to protect.

If the Coalition poison pill on the contracts really is more than the $1 billion projected and Tony Abbott holds the line and demands a $1.5 billion cheque from Victoria to repay already delivered East West grants, then the stable outlook on Victoria's AAA credit rating will immediately be at risk, especially given the huge amount of promises that Labor took to the election.

The Coalition behaviour on East West has been quite outrageous. It wasn't promised in 2010 and then they signed on to huge commitments and liabilities shortly before caretaker knowing full well that the Opposition would not honour the contracts.

However, if cancelling the project really does cost Victoria $2.5 billion, then Premier Andrews should proceed with a revised version of the project, potentially including provision for a future Doncaster Rail alignment in the tunnel.

Crikey promises project

Tap into ASA's excellent research lists

Any retail investor worth their salt should be a member of the Australian Shareholders' Association and the value proposition has never been better.

The ASA website has a growing list of interesting research lists, some of which are member-only behind the paywall. Here are a few favourites:

Longest serving ASX 200 directors

New CEOs who embrace write-offs

Biggest protest votes against directors in 2013

Measuring independent chairs for "skin in the game"

Capped SPPs which were then expanded

How retail investors do worse with separate bookbuilds

The 100 most important remuneration protest votes

31 examples of where retail investors gathered 100 signatures

ASA does not publish voting intentions reports free on its website. However, "subscribers" who merely give their details will get plenty of access so that's definitely worth doing.

And if you want to see all the research plus the full archive of AGM reports and voting recommendations since 2009, you really should become a member. Click here.

Crikey yarns since September

Having committed to deliver Crikey 50 stories between September 15 and Christmas, there will be plenty of work in December writing the final 20 pieces. Go here to subscribe to Crikey and check them out. Below are links to the first 30 pieces and they generally come out from behind the paywall after 3 weeks:

As Crown heads to its AGM, plenty of questions to answer
Crikey, Monday, September 15, 2014

Eddie Obeid, Wesfarmers, dilutionary capital raisings and an Arrium debacle
Crikey, Thursday, September 18, 2014

Time for Max to face his own axe at Southern Cross AGM
Crikey, Tuesday, October 7, 2014

Gina the wildcard at Fairfax AGM
Crikey, Wednesday, October 8, 2014

Transurban out-plays Labor and Liberal in Victoria
Crikey, Friday, October 10, 2014

A guide to the major media company AGMs
Crikey, Monday, October 13, 2014

Companies for old men: the codgers who won't let of their board seats
Crikey, Tuesday, October 14, 2014

Mayne explains City of Melbourne's $76m property splash
Crikey, Wednesday, October 15, 2014

Why is The OZ spinning for overpaid and underworked Gina Rinehart?
Crikey, Tuesday, October 21, 2014

Why the Senate should not abolish 100 signature rule for EGMs
Crikey, Wednesday, October 22, 2014

Naming and shaming Victoria's most secretive councils
Crikey, Thursday, October 23, 2014

Labor victory would give CFMEU keys to the kingdom
Crikey, Monday, October 27, 2014

Director protests overtaking remuneration reports
Crikey, Wednesday, October 29, 2014

How Sydney and Melbourne do central city planning so differently
Crikey, Thursday, October 30, 2014

Revealed: Murdoch salaries top $600m from News Corp
Crikey, Monday, November 3, 2014

A full history lesson on Packer, Crown and Victorian Labor
Crikey, Tuesday, November 4, 2014

Wrap of the 2014 Fairfax Media AGM
Crikey, Friday, November 7

Succession challenges for the Commonwealth Bank
Crikey, Monday, November 10

Expect big protests at the Cabcharge AGM
Crikey, Tuesday, November 11, 2014

Murdoch vs Mayne in fiery Fox AGM in LA
Crikey, Thursday, November 13, 2014

Round two with Rupert at News Corp AGM
Crikey, Friday, November 14, 2014

Even the Saudi Prince has turned on Rupert
Crikey, Monday, November 17, 2014

Murdoch and the Saudi prince: scenario analysis
Crikey, Thursday, November 20, 2014

Governance issues aplenty at Nine for Costello to sort out
Crikey, Friday, November 21, 2014

How Ten's chairman avoided election
Crikey, Monday, November 24, 2014

Murdoch rent-seeking reaches new high in Victorian election
Crikey, Tuesday, November 25, 2014

Dreadful Cabcharge governance on full display at AGM
Crikey, Thursday, November 27, 2014

Last day of AGM season and a review of key highlights
Crikey, Friday, November 28, 2014

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From the member edition archive

The Mayne Report goes to more than 17,000 people but if you're a relatively new reader, here are some links to some of the more interesting email editions sent out over the past seven years.


Vic election, Herald Sun, Rupert votes, Tex, Xenophon and much morey
Sunday, November 23, 2014

Rupert AGMs, Cabcharge, Costello, Bolt, Ten and Victorian election
Sunday, November 16, 2014

CBA tilt, LA visit, Rupert AGMs, Cabcharge and state election
Wednesday, November 12, 2014

Cabcharge, donations for Rupert visit and governance reforms at City of Melbourne
Wednesday, November 5, 2014

Tilts, Fairfax, CBA, Brickworks, Albert Park, ASX, Woolies, pokies and Crown
Friday, September 20, 2014

We're back: inside a post-ASA election season blitz
Monday, September 15, 2014


Capital raisings, Ansell, IAG, Packer, pokies, Rich List, City of Melbourne and ASA update
Monday, December 23, 2013

Franking robbery, East West trust breach, BHP bonuses, John Gay and plenty more
Sunday, August 25, 2013

ASA policy paper, Kevin Andrews on the pokies, Senate preferences and much more
August 19, 2013

ASA, Billabong, Westfield, Newcrest, Shorten, Turnbull, pokies and then some
Monday, July 22, 2013

Rudd v Gillard, referendum, Labor sleaze, Clive Palmer, ASA, City of Melbourne and plenty more
Monday, June 24, 2013


Backing Rudd, Lachlan, Bob Brown media debate, Manningham governance, Gunns and St Kilda AGM
Monday, February 20, 2012

The OZ goes mad, Murdoch piracy, AFR, pokies double rate, Gina, council super, BoQ rip-off and power speech
Wednesday, April 4, 2012


Murdoch special, media inquiry, pokies, Manningham, Zara, secretive Shortenite crs and Vodafone take-down
Thursday, September 15, 2011

Elected to ASA board, pokies, Rio, Santos, RHG, Hartigan, Manningham, capital raisings and Rich List
Thursday, May 19, 2011


Paperlinx, Packer, Murdoch, Manningham, pokies, Rich ex wives, foreign takeovers and much more
Saturday, October 23, 2010

DJs, women on boards, ex Lib goes no pokies, preferences, Pratt-Shorten, Labor's debt and Manningham council audio
August 3, 2010

Director rankings, Rio, Westfield, MAP, Manningham, Paatsch, state election, rich list, pokies and much more
June 9, 2010

Political donations, Stokes, Westfield tower, Richard Colless, Manningham nursing home, state debt, Rich List and Grand Prix
February 23, 2010


Seven AGM, crazy Perth visit, Fairfax, Telstra, Transfield, capital raisings and much more
November 9, 2009

News Corp AGM, Packer, Fairfax, James Strong, Woolies, Eastern Golf, Kohler-Gatto and much more
October 20, 2009

Bad Bendigo, Mark Day, Manningham, pokies, NAB, Asciano, Rich List, Paladin and hostile EGMs
September 15, 2009

Macquarie AGM, Melbourne's decline, Asciano EGM, capital raisings, Goyder's pokies and AGM diary
July 28, 2009

2008 as the GFC hit and before we got overloaded at Manningham

71% backing at Centro, $11bn backing at BHP and huge Qantas protest
November 28, 2008

Combank's $700m ABC Learning debacle
November 13, 2008

Computershare AGM, Seven wash-up, audio highlights and ABC Learning chair under pump at Lend Lease
November 11, 2008

Toll board skewered over $55m executive rort
October 30, 2008

Transurban shareholder revolution - chairman almost defeated
October 28, 2008

A huuuuge day for Australian corporate governance
October 22, 2008

Rupert's accountability dodge, Macquarie's Italian hit, Babcock funds revamp, and rich lists.
October 20, 2008

BHP and Woolies tilts, AFIC push on Stan Wallis, ASX-Kohler yarn and new Rich Listers
September 26, 2008

Risk Metrics nails Macquarie and Babcock
September 18, 2008

Macquarie videos, Stokes raid, new board tilt, Oz Minerals, share trading and much more
July 25, 2008

Hegarty Payout rolled, history is made
July 18, 2008

Great debate at the Babcock AGM
May 30, 2008

Our liveliest edition yet
Thursday, May 8, 2008

Burrows quits, Rupert, donations, long-serving directors and much more
January 31, 2008

Markets tumble, Rupert book deal, Centro, Rich List, Xenophon, AFR tips and our buying spree
January 17, 2008


Fortescue Metals AGM: time for Twiggy and FMG to grow up
Sunday, November 8, 2007, 10.30pm

How $5bn worth of votes backed us against Rupert's dodgy gerrymander
Saturday, 20 October, 2007, 7.20am

Mayne family news

Philip Mayne, 10, has been most annoyed by the Liberal Party's repetitive attack ads interrupting his Minecraft videos on Youtube over the past month. He now walks around the house saying: "Labor: don't trust 'em".

Laura Mayne, 13, has just agreed to ask questions at a couple of AGMs coming up in December, but she's negotiated a $40 fee for each one. We might need some more donations - see above!

Alice Mayne, 11, was chuffed to finish second in the school captain ballot for grade 6 next year and on Friday night competed in her first talent quest on the guitar. A third place out of 9 left her tickled pink.

The beloved, Paula Piccinini, is very excited that her friend Suzanna Sheed is the new independent member for Shepparton.

"That's how you do it, Mr Serial Candidate," she declared last night during the count. Oh well, one can only dream!

That's all for now.

Do ya best, Stephen Mayne

* The Mayne Report is an independent email newsletter and website which promotes transparency and good governance in the corporate, political and media worlds. It is published by Stephen Mayne, the founder of, shareholder advocate and City of Melbourne councillor. To unsubscribe from this email list, click here.